Airbus vs Boeing 4

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Management 4p90|
The Rise of Airbus, 1970-2005
Professor: AUSTIN, B|


Table of Contents

1.0Introduction – Airbus’s history, development, and growth 3 2.0Internal strengths and weaknesses 4
3.0External environment 6
4.0SWOT Analysis 9
5.0Corporate-level strategy 10
6.0 Business-level strategy12
7.0Structure and control systems15
8.0Strategy Recommendations18

1.0 Introduction
Airbus is one of the world's leading aircraft manufacturers, and it consistently captures approximately half or more of all orders for airliners with more than 100 seats. Airbus was formed in 1970 by a consortium of France’s Aerospatiale, Germany’s Deutsch Airbus and Spain’s CASA. The main business is to design and manufacture civil transports. The companies first decided to build their first twin-engine wide body airliner - the A300. However, at that time, Boeing, which becomes its biggest competitor in following decades, enjoyed most market dominance with various airplane products. Therefore, in the infancy, A300 was not a particular success for Airbus. It was not until 1981 and the introduction of the A320 made Airbus become a major manufacturer in the civil aviation industry. This model was a great success because it adopted a computerized system of flight controls - fly-by-wire technology. Basing its technological leadership, Airbus used the family concept to satisfy different airline customers’ needs. For expanding marketing and sales, Airbus’s early strategy is aiming the small airline in Asia and the Middle East. The increasing sales made Airbus gain worldwide recognition. In 1978, it successfully broke into American market. After that, Airbus focused on developing new model, increasing sales and cutting costs. Since then, the sharp rival between Airbus and Boeing never stop. In the recent years Airbus has regularly delivered more aircraft’s than its rival and consistently booked at least half of all new orders. And it also captured the imagination of the world with A380- the biggest airline ever built and which is setting new standards in the aviation Industry. 2.0 Internal strengths and weaknesses

2.1 Internal strengths
Commonality has been part of the Airbus vision from the very beginning. As early as the mid-1970s, Airbus has planned a series of derivatives of the original A300 to build a full family of airplanes- short haul, medium haul and long haul. The Airbus strategy was very straightforward and the objectives were very simple. Airbus wanted to offer the airlines a full line of products presenting the most extensive commonality possible in order to make training, operations and maintenance easier and less expensive for customers. Airbus has several particular internal strengths relies on commonality which includes: strong quality, good reputation, cost advantage, Innovation. Airbus as an organization has many strengths, their main strength is the strong quality. For building the Strong Quality, Airbus focuses on safety, reliability, and comfort. Their mission states that they want to create the best and safest aircraft. They have an operational reliability control program for their aircraft which focused on ways to implement a streamlined reliability program within an organization of maintenance and engineering (Airbus S.A.S., 2008). The protection included in the fly-by-wire system is a factor in enhancing the safety. Passenger comfort is very essential to sell those seats and have returning customers. That is why when they are designing and building these aircrafts their top priority is cabin comfort. In addition, the strong quality leads Airbus gains a worldwide reputation. In 1998, Airbus has 29 worldwide market share, Boeing has 71%; but in 2003, Airbus’s market share growth to 52%, it’s the first time over the half share. The second strength is its cost advantage. Because of the recession which intensified competition among aircraft...
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